During 2014, Barden Building Company constructed various assets at a total cost of $12,600,000. The...
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Accounting
During 2014, Barden Building Company constructed various assets at a total cost of $12,600,000. The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2014 were $8,400,000. The company had the following debt outstanding at December 31, 2014:
1. 10%, 5-year note to finance construction of various assets,
dated January 1, 2014, with interest payable annually on January 1 $5,400,000
2. 12%, ten-year bonds issued at par on December 31, 2008, with interest
payable annually on December 31 $6,000,000
3. 9%, 3-year note payable, dated January 1, 2013, with interest payable
annually on January 1 $3,000,000
Instructions
Compute the amounts of each of the following (show computations).
1. Avoidable interest.
2. Total interest to be capitalized during 2014.
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